Simple Interest Calculator
Compute simple interest on a principal amount over any period.
Simple Interest — At a Glance
Simple interest is a flat percentage charged on the principal for the full period. It does not compound — unlike most bank deposits and mutual funds.
Frequently Asked Questions
What is simple interest?
Simple interest is calculated only on the original principal — interest is not added back to earn more interest. It's commonly used for short-term loans and some government schemes.
What is the simple interest formula?
SI = (P × R × T) ÷ 100, where P is principal, R is annual rate (in %), and T is time in years.
Where is simple interest used?
Used in vehicle EMIs (some NBFCs), short-term business loans, post office monthly income schemes, and friendly loans. Most bank products use compound interest.
Simple vs compound — which pays more?
Compound interest always pays more (for investor) or costs more (for borrower) than simple interest for the same rate, principal, and period over 1 year.